June 6th, 2011

Some thoughts on Incentives and Rewards for the podcast this week:

The following is from a 1993 HBR Article titled: Rethinking Rewards: “In fact, we believe our incentive compensation program is at the heart of our company’s success… Since we adopted this approach, the quality of the budgeting process has substantially improved. Finally, award opportunities are uncapped, and, as a result, they encourage the entrepreneurial spirit that we value. When designed effectively and integrated thoroughly into the management process, executive incentive programs work well for management and shareholders alike.” L. Dennis Kozlowski (Former Chairman and CEO of Tyco Laboratories and now residing in a New York Correctional Facility for financial crimes).

If a site were to imagine what safety excellence looks like, what role do incentives play? I would not define safety culture excellence by what we have to do to prompt desirable behavior. Excellence to me looks like a naturally occurring series of desirable behaviors that occur unprompted. I prefer approaches that inspire people to do things above and beyond what is required for the right reasons, and recognize them for then doing more than what is expected for their job. Often positive reinforcement (R+) is sufficient.

Managers can certainly reward the individual behaviors, nothing wrong with recognizing behaviors that helped achieve a result. I agree with that. I just want to ensure people are performing these desirable behaviors for the right reason, not the reward. If an organization cannot afford to pay their reward program and if the behaviors are not occurring for intrinsic reasons, they will often cease. I choose to set goals, inspire, coach, recognize and then lead by not leading.

When people see progress and are recognized for their individual efforts, you have developed a sustainable model for performance. Telling them if you do this, I’ll give you that and then no longer can, isn’t sustainable. It should be recognized that we all are trying to develop paths to the same goal: Creating a world safe and free from risks and a society that knows the precautions necessary to keep themselves injury and disease-free. Both I believe can only be sustainable through an intrinsic passion for excellence, and the right combination of tools. Incentives can certainly be a starting point; they just shouldn’t be the ending one. If this is a site’s ending point, than they aren’t there yet.

What are your thoughts?

I hope you enjoy the podcast this week. If you would like to download or play on demand our other podcasts, please visit the ProAct Safety’s podcast website at: http://www.safetycultureexcellence.com